Senior VP of Software & Chief Commercial Officer, IBM
IBM's Rob Thomas on why companies fail at innovation—and how iteration fixes it
Rob Thomas has spent more than two decades at IBM, rising from consultant to SVP of software and chief commercial officer.
About Robert Thomas
Rob Thomas, Senior Vice President of Software and Chief Commercial Officer at IBM, has been a frequent commentator on enterprise AI adoption and value creation. In early 2026, he stated that the most incorrect idea about AI is fear, arguing that productivity growth—driven by AI—is the only path to continued GDP growth. He noted that S&P 500 operating margins have risen from roughly 13% in 2019 to about 19% in recent quarters, attributing this in part to technology. Thomas has emphasized that 2025 would be a year of "value creation" with AI, moving beyond experimentation. He has also discussed IBM's own use of AI, stating the company generated $4.5 billion in productivity by automating manual tasks and has displaced some jobs while hiring into R&D roles. Thomas has been involved in several major IBM acquisitions, including the $11 billion purchase of Confluent, which he described as "the rails of this AI moment" in a December 2025 interview. He has also discussed the importance of open source in AI, arguing it prevents vendor lock-in and reduces barriers to adoption. Thomas has advised companies to focus on cost savings before revenue when starting with AI, and to embrace iteration over large, long-term projects. He has also spoken about the cultural and change management challenges of AI adoption, noting that a Fortune 50 CIO told him that while the technology works, getting people to use it remains difficult.
Transcript (46 segments)
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Ruth0:00
In a career spanning global markets, bold pivots and breakthrough technologies, Rob Thomas has learned what it truly takes to lead transformation. As IBM Senior Vice President of Software and Chief Commercial Officer, Rob oversees one of the world's largest enterprise software portfolios, helping clients turn AI, data and automation into measurable business impact. In this episode, he reflects on the defining inflection points that shaped his career and why drive, curiosity and an insatiable love of reading have been his greatest catalysts for growth and innovation. Rob also unpacks what distinguishes companies that say they are AI-first from those actually delivering results, and how leaders can bridge that gap. Here's my conversation with IBM's Rob Thomas on leadership, learning and what it takes to build an AI-first business that is truly future-ready.
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Narrator0:52
Are you ready to nurture what's next? Reimagine industries to turn bold ambition into the beginning of everything. What's your next brilliant move? McKinsey and Company.
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Ruth1:04
Rob Thomas, Senior Vice President of Software and Chief Commercial Officer at IBM, welcome. Thank you so much for joining us here at Fortune Next Lead. Ruth, great to be with you. Looking forward to it, all right? Well, let's delve first into your career and leadership ascension. You spent more than two decades at IBM, rising through microelectronics, consulting, now global software and sales. What's helped you make that progression from someone who was a technical operator to now someone who is this enterprise-scaled leader?
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Robert Thomas1:23
IBM is an amazing company where you can be here for 20-plus years and do a lot of different roles. I joined IBM in consulting. I didn't really know much about consulting, so I was trying to figure out what to do, and I just started meeting with clients. Apparently the official way to do things at IBM was to wait for somebody to invite you to go to a client, but I just started meeting with clients. I remember it well; my manager called me in and said, 'You really shouldn't be out meeting with clients.' And I have respect for authority, so I said okay. But I thought about it over the next week and realized that person might not be right. The reason it stuck with me is that I kept doing it, and then other people started coming to me: 'Hey, we hear you have that client, we want to come along.' I realized that in a big company, sometimes well-intended rules get misinterpreted. I don't think that person was wrong in what they were trying to convey, but it led me to always remember that we exist because there are clients, and you can never go wrong working with clients. I then moved into microelectronics—I didn't know much about that, so I had to learn a lot. At one point I ended up in Japan, and when I moved back to the US I moved into software, eventually running software engineering. I've always been curious and open-minded to try completely new things, knowing that on day one you're going to know nothing, so you have to have the humility to say, 'Maybe I can figure it out.' That takes time to get comfortable with.
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Ruth3:18
So every role you pivoted to, you knew very little about. Was it naivete, which can be useful, or was it drive?
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Robert Thomas3:24
Probably a little naivete, a lot of drive. I've always been interested in challenging myself. There is a Vince Lombardi quote: 'We will aspire for perfection, knowing it's not possible, but along the way maybe we can achieve excellence.' I'm driven to do interesting things in a high-quality way, which means being open-minded to different approaches. I read a ton—that doesn't make me an expert—but then I figure out what works and talk to people who have been in the field. Over time, I encourage people to get comfortable outside their typical comfort zone, because I think you grow as a result.
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Ruth4:23
As you look back, was there a defining project, a challenge, or even a mentor that truly transformed how you lead or think about leadership?
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Robert Thomas4:29
I'll give you a story from when I was in Japan. I'd spent a summer there in college, so I had some familiarity, but Japan is unlike anywhere in the world. The people are incredibly kind but not very open, so you have to earn everything. They won't just tell you what's on their mind, so you have to make them comfortable. It teaches you new leadership lessons. I went there to run microelectronics and services around high tech—the leading technology in the world. The first thing I came across was a team working on a pachinko machine, which is basically a cross between a pinball machine and a slot machine, all mechanical. I thought, 'What are we doing? Why are we working on pachinko machines? I thought we'd be designing semiconductors and embedded software.' To their credit, they saw a customer struggling to transition from physical to digital and thought they could help. My initial instinct was, 'We shouldn't be doing this,' but if you're open-minded, the teams closest to the ground might have the best ideas. The founder of Toyota used the word 'GEMBA'—the truth lies on the factory floor. The truth of what customers need is closest to where the action is, not in the C-suite. So we let that go, kept building, and ended up doing stuff in printing and digital cameras, which led to gaming. If we hadn't let that flower blossom, I'm not sure we'd have gotten the business where it was. That was an enduring lesson: maybe the secret is on the factory floor.
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Ruth7:05
I want to talk about leading at scale. You now oversee IBM's software division and its global commercial organization, a rare combination of product and profit responsibility. At most companies those functions are split. How do you align IBM software teams with sales and profit goals without stifling creativity and innovation?
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Robert Thomas7:18
It's difficult—there's a balance. On the commercial side everything is focused on the short term, while on the R&D side it's focused on the medium to long term, because nothing gets built overnight. Part of the balance is shifting gears between those two modes depending on the meeting or time of quarter. I've discovered why many large companies struggle to innovate: it comes down to one word—iteration. Large companies typically have long planning processes and want to make big bets, which is the opposite of iteration, where you do a little, get feedback, and adjust. That's not the culture of most large companies. Having both roles has forced me to see that. When we acquired Netezza, the founder, Jed Saxena, an incredible person, told me that when he invested in a company he'd meet with them monthly and ask, 'What are the customers telling you?' They'd come in, tell him, and he'd suggest, 'If they said that, maybe go do that.' Over three years, they ended up doing something dramatically different, but that leads to a great product and innovation. When I heard that story, I realized we didn't do that at all at IBM. We'd say, 'We decided to build this, it will come in two years.' That was a sign that we had to completely change how we innovate. Now we try to be much more iterative: build a little, test, learn a lot as we go, and our products are a lot better for it.
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Ruth9:55
How do you change that culture at an organization as sprawling as IBM, where one set of thinking is deeply entrenched and has been for a long time? Easier said than done.
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Robert Thomas10:10
It is. Back to my comment about the secret on the factory floor: there are people in every big company who know the right thing to do. It's our job as a leadership team to find them and elevate them. They tend to be people who break a lot of glass—they have a strong view, don't follow normal processes, are louder, maybe slightly more disagreeable. Part of our job is to encourage that, as long as it's not disrespectful or creating so much confrontation the company can't function. We're a long way from that, but you have to encourage people who stick their neck out—that's the best way to change culture.
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Ruth11:13
You've said that operational excellence often separates good leaders from great leaders. Many are great at setting strategy and being visionaries, but fewer can actually execute. How do you do that at a place like IBM?
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Robert Thomas11:29
I like to write a lot. I send out something every Monday to a number of people in the company, and maybe once or twice a year I write something longer form. It's my way of getting ideas out of my head. It helps people know what we should focus on and what the priorities are. If people lose the plot on direction, it slows execution. Leaders have to find different ways to communicate. I like to write—a few times a year it's a four- to seven-page white paper. The Monday snippets are short emails with no clicking required, just something I did the week before or something I'm thinking about. That keeps everybody on the same page. Now to your question on operations: I study how other people work. John Rockefeller had an insight eventually called the Rockefeller Habits. He said you only need three things to drive execution: priorities, data, and rhythm. Priorities mean we all know what's important—three to five things that matter. Data means we measure whether we're making progress on priorities or not. Rhythm means a consistent approach to checking progress on priorities with data. Organizations that struggle have rhythms all over the place, data that's not useful, or priorities that change constantly.
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Ruth14:06
You write a newsletter called The Mentor and often talk about leadership development. What skills or mindsets should every aspiring CEO or C-suite executive cultivate earlier in their career? What do you wish you had cultivated?
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Robert Thomas14:24
The biggest habit is one of the least popular right now: reading. Are you willing to block time to read, study, and go down rabbit holes? A lot of people don't because they're too busy jumping from one thing to the next. Two, try things. I started The Mentor because I read in the newspaper that Substack had raised $40 million. I thought, 'How is that possible?' So I signed up, and when it asked what my newsletter was about, I made it up on the fly. It was just curiosity about how they raised so much money.
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Ruth15:36
How much time do you spend reading on a daily basis?
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Robert Thomas15:41
A lot. I get up early, exercise, then read for two or three hours before the day starts. Then I try to carve out time each day, and certainly when traveling on a plane. I'd say 30 to 40% of my time I'm reading something—not just about my industry, because I'd get bored. I love biographies. If I see a successful sports team, I want to know what the coach is doing. If a new chef is popular, I want to know why. It's about people who are successful and have a unique approach.
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Ruth17:01
You've written books on AI transformation, including The AI Ladder published in 2020. What's changed in the five years since, and what still holds companies back from scaling AI?
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Robert Thomas17:11
Let me give a historical analogy. In 1880, the first commercial application of electricity was the light bulb, used in manufacturing facilities to replace gas lamps. That improved productivity. But the real impact came 30 years later when electricity powered motors at every manufacturing station, leading to the assembly line and the Model T. So electricity went from a light bulb to motors that changed manufacturing. With AI, we're still at the light bulb moment. I read in the Wall Street Journal that a large bank can now do email summaries. Is that what we were promised? AI drafting emails and summarizing so nobody has to read them? No wonder reports say AI isn't delivering ROI—if the application is email summaries, that's a light bulb. But I'm starting to see evidence of the motor: AI is changing how companies work. At IBM, we said we'd be the most productive company in the world, and by the end of this year we'll have generated $4.5 billion in productivity by automating manual tasks—basic repetitive tasks like employee verification, salary planning, procurement. Applying AI to make things run more efficiently has had a profound impact. The number one question I get from clients is, 'Can you do that for us?' They're at the light bulb moment and looking for a motor.
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Ruth20:19
Would you say IBM is at the motor stage, and where are your competitors or clients?
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Robert Thomas20:25
We have the most ambitious evidence that we've moved well into the motor stage. We've changed how we operate, taken out cost, and shifted labor—some jobs have been displaced, but we've hired people into R&D. Looking around, I think we're a bit ahead of others in transforming what we do, but others are starting.
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Ruth21:10
Many organizations claim to be AI-first. What distinguishes companies turning AI into real business results from those just experimenting?
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Robert Thomas21:22
It's a cultural endeavor. If there's one thing people underestimate but distinguishes winners, it's the willingness to take on that cultural battle. I wrote about the '100% fallacy.' People say, 'Either AI is 100% accurate or it's 100% human.' But humans are not 100% accurate. Why hold AI to a higher standard? If you say you'll only use AI if it's 100% successful, you set a bar no technology can clear. Can you live with imperfection that's still better than manual processing? That's the first cultural willingness. Second, reskilling employees. Maybe we have fewer people in the back office but more in software engineering. That requires a reskilling effort.
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Ruth23:07
Should the onus of upskilling fall on the employer or the employee?
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Robert Thomas23:17
I love that question. Employees often say, 'You should be training me.' And I say it's our own job to make sure our skills are evolving. I can't imagine sitting around waiting to be trained. At the same time, the employer plays a role—we want to be one of the most important companies, so we have to invest in our people. We've started new training programs for technical talent and general managers. But it's both. If individuals wait for the company, they'll already be behind.
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Ruth24:21
How are you using AI personally, and how do you see AI reshaping leadership, especially decisions and performance measurement?
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Robert Thomas24:36
It should change the velocity of how we work. In product reviews, instead of asking what clients say, I'd rather look at data on how the product is being used. We built a new product that integrates different AI models, choosing the best model for the task to optimize performance and cost. Instead of someone telling me whether they like it, I look at the data: Are people using it? How? That's not all AI—it's using data instead of opinion—but training yourself to ask those questions increases velocity because you're not chasing opinions. Personally, for anything I do now—cooking, hobbies, preparing for client meetings or speeches—I start by asking what's the best way. For speeches, I used to write everything myself. Now I can say what I want to say and ask for the best structure. It still requires 30% editing, but it gives a jumpstart.
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Ruth26:24
Any apprehension that innate skills might atrophy if you over-rely on AI?
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Robert Thomas26:33
We have to be careful with people early in their career. They need to learn the basics. I don't have a speech writer; I like to write everything myself and find my own stories. If I didn't do that without AI, it would be hard to do it well with AI—you'd look like a robot. You have to build a base of skills before you augment too much, or the augmentation won't be good. For example, when we rolled out coding tools, it made the 10x person way better but the average person only a little better. If you don't have the foundation, AI can't really distinguish you—maybe 5% better, but that's not enough.
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Ruth27:43
Back to job displacement: for those outside tech, it can be nerve-wracking. IBM has seen job disruption but also hires in other roles. How do you lead through that with empathy and realism?
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Robert Thomas28:07
I wrote a book in 2016 called The End of Tech Companies. The point was that every company will be a technology company, so we better start thinking about what that means. I believe we're in that moment now. Regardless of industry—healthcare, banking, insurance, manufacturing—everyone thinks of themselves as a technology company. First, accept that reality. That leads to a different path for training and how jobs will change. History shows technology is good—it creates growth. The Nobel Prize-winning group said it's disruptive and painful, but it drives growth, and growth is good. People have to be comfortable that their day-to-day might change. Those who cling to 'this is how we've always done it' won't feel good at some stage.
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Ruth29:50
Is growth always good?
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Robert Thomas29:52
Economic growth is definitely good. It's eradicated disease, created wealth, and made a big dent in starvation. So yes, economic growth is very good.
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Ruth30:04
What does success look like for IBM's software business over the next three to five years, and what's the biggest lever you're pulling?
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Robert Thomas30:10
We've changed a lot about what software is at IBM. It's now nearly 50% of the company. The catalyst was wanting IBM to grow faster—growth is everything in technology. We only had one path: be at the front end and drive growth. We looked at what we're not good at and divested things like healthcare and weather applications. We got back to what we do best—the boring infrastructure that makes everything work. We process over 90% of the world's credit card transactions—nobody knows it's IBM. We're the nervous system of the economy. The opportunity: everybody knows the name IBM, but not everybody knows what IBM is today. Our top 2000 clients know us, but that's only half the market. The biggest growth opportunity is introducing ourselves to the other 50,000 companies.
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Ruth32:49
Quick speed round. What's the single biggest leadership lesson you've learned about reinvention and staying relevant?
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Robert Thomas32:54
It's an everyday thing. Every day I commit to learning more, reading more, trying new things. If everybody at IBM does that at scale, the company will constantly be relevant.
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Ruth33:23
What book changed your approach to business or leadership?
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Robert Thomas33:29
A book I read early in my career: Life Is Not a Game of Perfect by a sports psychologist. It has little to do with business but some business stories. The premise is you'll never be perfect, but you need a process and consistency. Focus on the process, not the outcome. That has stuck with me. If you have a process and are consistent, you'll be successful.
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Ruth34:26
You run one of the largest divisions at IBM. How do you stay connected to people several layers below to make them feel seen and heard?
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Robert Thomas34:41
A few ways. Monthly I do an Ask Me Anything on Slack—in half an hour I plow through 80 to 100 questions. The signal you get is amazing; if I hear the same thing a few times, it's a real problem. Another way: somebody suggested I create a council where I hear from people without their bosses. I started meeting with non-managers in roundtables. After a while, they get comfortable and share anything. I also meet with managers separately. What you hear from individuals is dramatically different from managers, and both are good. Those techniques give me a lens on what's actually happening, because a lot that comes to me has a filter. It's important to get truth from where the action is.
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Ruth36:09
And you might already be doing this, but AI could be additive—pulling all the Ask Me Anything responses to identify problem areas.
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Robert Thomas36:15
That's a great way to use technology.
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Ruth36:20
All right, don't say Fortune never helped you. Rob, thank you so much for joining us. Such a pleasure.
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Robert Thomas36:25
Great to be with you.